Accounting accruals and information asymmetry in Europe

We investigate whether the positive relation between accounting accruals and information asymmetry documented for U.S. stock markets also holds for European markets, considered as a whole and at the country level. This research is relevant because this relation is likely to be affected by differences in accounting standards used by companies for financial reporting, in the traditional use of the banking system or capital markets for firm financing, in legal systems and cultural environment. We find that in European stock markets discretionary accruals are positively related with the Corwin and Schultz high-low spread estimator used as a proxy for information asymmetry. Our results suggest that the earnings management component of accruals outweighs the informational component, but the significance of the relation varies across countries. Further, such association tends to be stronger for firms with the highest levels of positive discretionary accruals. Consistent with the evidence provided by the authors, our results also suggest that the high-low spread estimator is more efficient than the closing bid-ask spread when analysing the impact of information quality on information asymmetry.

Building Smarter Cities through Social Entrepreneurship

The objective of the present study is to examine the extent to which social ventures are able to increase the smartness of the cities. To achieve this goal, we adopt a qualitative approach, based on the case study method to obtain valuable insights about different characteristics and strategies of Cais (a non-profit association dedicated to help disadvantaged people in urban areas). By focusing on the analysis of the Cais activities, we assess whether its social intervention match the dimensions proposed by Giffinger et al. (2007) to rank smart cities’ performance, namely if it has smart: (i) economy; (ii) people; (iii) governance; (iv) mobility; (v) environment; and (vi) living. The research shows that the action pursued comprises elements from all the above mentioned dimensions. Further, the analysis reveals that Cais reinforces the smartness of the city where it acts (attributes such as living, economy, people, and environment).